Baghdad: Back in Business

Since 2003 Iraq has been rebuilding itself under a renamed Baghdad airport and in addition to a handful of foreign carriers re-entering the market, a new, small European carrier has just launched flights to the city but confidence remains key to Iraq's long-term economic recovery.

On Monday (February 1), Swedish charter carrier - Viking Airlines - launched its start up operation, Viking Hellas, which has begun three-times weekly scheduled flights from Manchester to Athens, (its headquarters), with onward connections to Erbil, Sulaimaniyah and Baghdad.

Viking Hellas believes there is a "high demand" for scheduled services to Iraq from Manchester. Its commercial director, Roger Gatt says: "These routes were chosen due to the high demand of the expatriate community that has very little options to return home. This new service is a lifeline for them, as well as being an alternative for the Greek student community in Manchester."

Iraq works with Viking Airlines' strategy to adapt to markets where there is demand, as Gatt explains: "In order to survive in this difficult economic climate you have to adapt your business model to meet changing market needs and we are optimistic that we will succeed by continual innovation."

Commenting on the Manchester airport's decision to pair up with the Viking group for new Iraq services, its commercial director, Andy Harrison told Routes News: "A lot of the European hubs served from Manchester have connections into Iraq. We realise there is heavy traffic out of Iraq so we are pleased we can now offer our passengers more choice with Viking Hellas' onward services from Athens into three Iraqi cities."

An agreement to interline with Aegean Airlines and Olympic Air will also help to provide the airline group with connections to its Athens network.

Partner Viking Airlines - a charter carrier - has been operating out of Manchester to 14 destinations, mainly to the Canaries and Greek Islands. "For the charter airline side of the business, we see these routes continuing where there is demand and hopefully growing in the future," Harrison adds.

Two A320s are expected to replace Viking Hellas' existing 737-800s in spring, providing the potential for increased capacity on the route.

So far this year, interest in Iraq has also been expressed by Lufthansa, which announced that it has secured traffic rights to serve Baghdad and Erbil from this summer, and hopes to start up services from Munich and Frankfurt. Additionally fellow German carrier Air Berlin this week commences services from Munich to Erbil and Sulaymaniyah.

Bahrain civil aviation undersecretary, Capt. Abdulrahman AlGhoud announces Gulf Air's resumption of services to Baghdad on September 1. Baghdad is the country's largest market, with 52 scheduled weekly departures.

Iraqi Airways Steers Domestic Growth

Iraq's capital, Baghdad is currently the country's largest market, with 52 scheduled weekly departures to domestic and international destinations.

A comparison of the schedule of weekly flights from Iraq in February 2009 with the schedule this month provides some indication of how the market is growing.

Carriers operating from Iraq (February 1-7, 2010 and 2009):

Source: Flightbase

As the tables show, there were just 17 scheduled weekly departures from Iraq last January (operated by seven carriers, including the now-bankrupt Slovak Airlines). This compares with 151 flights for the same period this year.

This represents a 72% increase in overall traffic and highlights the growth in the market, however Iraqi Airways takes a 70% share of the domestic market.

Its current schedule is summarised:

Iraqi Airways doesn't yet have a European service, but plans to extend its network to Europe. Plus, its establishment as the country's home carrier has helped to grow the network.

The rest of the network is made up of major foreign carriers (Viking Hellas' small network being an exception), including those that previously served Iraq before the war and have since resumed operations here.

In 2003, Turkish Airlines was one of the first foreign carriers to enter Iraq, with services to Erbil and Baghdad. From March, it plans to extend the network to include Basra in southern Iraq.

Other airlines resuming services to Iraq include Austrian Airlines (to Erbil), while in 2006, Royal Jordanian began operations to Sulaymaniyah in Northern Iraq to supplement its services to Baghdad and Erbil.

Middle East Airlines also offers regular flights from Beirut to Baghdad and Gulf Air gained rights to return to Iraq last July. Services began to Baghdad on September 1, Najaf on September 26 and Erbil on October 27.

As the data suggests, Gulf Air and Turkish Airlines - the two largest foreign carriers - have the potential to earn high revenue on routes to Iraq. The average one-way fare for Gulf Air is almost $200 and for Turkish Airlines, nearly $250 (one-way) - a sign that the 'Baghdad bounce' is helping to grow the economy and demand.

It is clear that there are business opportunities in Iraq as the country continues to develop and the carriers seek to benefit from increasing demand for travel to and from Iraq.